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I'm currently reading this book recommended by Personal Finance Digest called "Get What's Yours: the Secrets to Maxing out your Social Security." It's two things: first, it's a deep-in-the-weeds examination of the mechanics of Social Security and an explanation of different strategies singletons, marrieds, the divorced, the widowed, the childless and the childful, can use to maximize their lifetime Social Security benefits. That part is excellent (I'll review the book on my blog soon).
But the second component of the book is also an illustration of a trend that I find extremely troubling, which is lifestyle advice masquerading as personal finance advance. In other words, a personal finance guru pretending to be a personal finance advisor.
For example, this from page 99:
"If you're sick and tired of your job, you can't stand your boss, and you can't wait to retire, please stop and think it over. This is a huge financial decision. You need to get it right.
"Idyllic retirements are more the stuff of movies than real life. Your golf game may be lousy; your bowling, worse. You may already go to as many book clubs and yoga sessions as you can stand. You could drive your partner nuts hanging around 24/7, and you could live, well, forever...Do you really want to be retired and living on peanuts for more than half a century?"
This is not personal finance advice. It's lifestyle advice. It's not advice to do or consider doing a particular thing with your income, assets, or liabilities. It's advice to be a particular kind of person: a person who is willing to work a job they hate, answer to a boss they hate, and who can wait to retire.
In the world of personal finance, this mixing and mingling of personal finance and lifestyle advice is extremely common — so common you may not even notice it any more. For example, I've heard a rule of thumb when house hunting to "buy the smallest house in the best neighborhood you can afford" (for example: http://fruitionfinancial[dot]com/2013/05/01/house-rule-2-buy-the-worst-house-in-the-best-neighborhood/). But that's not personal finance advice, that's lifestyle advice: be the kind of person who will be satisfied with a smaller house rather than a larger house.
Likewise, "consider contributing after-tax income to a 401(k) in order to retain the option to later roll it over into a Roth IRA" is personal finance advice, while "instead of buying a new car, buy a used car and use the savings to increase your after-tax 401(k) contribution" is lifestyle advice.
Just because a decision touches upon your finances does not necessarily make it a legitimate subject for personal finance advice. That's because your personal finance advisor is a different person than you, with different preferences for large versus small, new versus used, and work versus leisure. They may be able to tell you what the consequences for your personal finances are of one decision over another, but they can't tell you which you should prefer, because which you should prefer is a characteristic of you, not of your money.
But the second component of the book is also an illustration of a trend that I find extremely troubling, which is lifestyle advice masquerading as personal finance advance. In other words, a personal finance guru pretending to be a personal finance advisor.
For example, this from page 99:
"If you're sick and tired of your job, you can't stand your boss, and you can't wait to retire, please stop and think it over. This is a huge financial decision. You need to get it right.
"Idyllic retirements are more the stuff of movies than real life. Your golf game may be lousy; your bowling, worse. You may already go to as many book clubs and yoga sessions as you can stand. You could drive your partner nuts hanging around 24/7, and you could live, well, forever...Do you really want to be retired and living on peanuts for more than half a century?"
This is not personal finance advice. It's lifestyle advice. It's not advice to do or consider doing a particular thing with your income, assets, or liabilities. It's advice to be a particular kind of person: a person who is willing to work a job they hate, answer to a boss they hate, and who can wait to retire.
In the world of personal finance, this mixing and mingling of personal finance and lifestyle advice is extremely common — so common you may not even notice it any more. For example, I've heard a rule of thumb when house hunting to "buy the smallest house in the best neighborhood you can afford" (for example: http://fruitionfinancial[dot]com/2013/05/01/house-rule-2-buy-the-worst-house-in-the-best-neighborhood/). But that's not personal finance advice, that's lifestyle advice: be the kind of person who will be satisfied with a smaller house rather than a larger house.
Likewise, "consider contributing after-tax income to a 401(k) in order to retain the option to later roll it over into a Roth IRA" is personal finance advice, while "instead of buying a new car, buy a used car and use the savings to increase your after-tax 401(k) contribution" is lifestyle advice.
Just because a decision touches upon your finances does not necessarily make it a legitimate subject for personal finance advice. That's because your personal finance advisor is a different person than you, with different preferences for large versus small, new versus used, and work versus leisure. They may be able to tell you what the consequences for your personal finances are of one decision over another, but they can't tell you which you should prefer, because which you should prefer is a characteristic of you, not of your money.